Waller Says August CPI Is Key to a Rate Decision

Summary

Federal Reserve Governor Christopher Waller says the next rate decision will be heavily influenced by August CPI due next week, and he would consider a rate hike if inflation comes in hot. Bloomberg's Michael McKee notes that other Fed officials, including Kevin Warsh, are also sounding hawkish and questioning whether policy is sufficiently restrictive. Waller currently believes policy is only slightly restricting demand, making the upcoming inflation print a pivotal data point. The discussion implies a stronger-than-expected CPI could shift FOMC policy toward another hike.

• Fed Governor Waller says August CPI will heavily influence the next rate decision.
• Waller would consider a rate hike if inflation comes in hot.
• Waller sees current policy as only slightly restricting demand.
• Kevin Warsh argues it is hard to say policy is restrictive.
• Fed officials are positioned to hike on stronger-than-expected CPI.
• August CPI due next Friday becomes the key watched data point.